The State Bank of Pakistan (SBP) said on Friday that it has received $1 billion in foreign exchange reserves from China.
“This is to inform you that $1 billion has been received from China,” the central bank stated in a brief message to reporters Friday night.
The refinancing came just hours after Finance Minister Ishaq Dar assured the National Assembly’s (NA) Standing Committee on Finance and Revenue that China would refinance the $1 billion loan it had previously provided to Pakistan.
In response to the country’s shrinking foreign reserves, Dar stated that $1.30 billion just paid to settle a Chinese debt will be refinanced by China today or Monday.
“SBP will receive $1.30 billion from China today or Monday,” Ishaq Dar said, adding that talks with Beijing for a $2 billion dollar swap were also ongoing.
Pakistan’s economy is in disarray due to financial difficulties and a delay in reaching an agreement with the International Monetary Fund (IMF) that would release much-needed cash critical to avoiding default.
In the midst of political unrest, Pakistan shows no signs of receiving external financing anytime soon.
Since the end of January, the government has been in talks with the international lender about resuming the $1.1 billion loan tranche that has been on hold since November as part of a $6.5 billion Extended Fund Facility (EFF) agreed upon in 2019.
Meanwhile, in an interview with Bloomberg, Moody’s Investor Service analyst stated that Pakistan is on the verge of “default,” and that Pakistan cannot complete the current IMF loan programme until June 30.
‘Pakistan-IMF talks neither failed nor concluded’
A day earlier, Finance Minister Ishaq Dar stated that discussions between Pakistan and the International Monetary Fund (IMF) had not failed and that the negotiation phase had not ended.
During a press conference, Ishaq Dar expected that the 9th review of the IMF programme will be finished this month. “Our discussions with the IMF are ongoing and have not yet concluded.” We had already made the payment about which Fitch was concerned.”
“The Pakistan-IMF talks have not failed, and there is no payment problem until June 30.” We are totally prepared to make payments on time until June 30.”
According to the finance minister, some factions want Pakistan to be like Sri Lanka before engaging in IMF discussions. “A geopolitical campaign to default Pakistan is underway.” The State Bank Act modifications are unbearable. We have also changed the State Bank Act, but it is still completed.”
Dar stated that State Bank is a Pakistani bank that is not affiliated with any worldwide entity. “It is our priority to make all payments on time, including bonds.”
Ishaq Dar has denied claims that the federal government may freeze lockers, gold, and Roshan Digital Accounts. He went on to say that Pakistan’s enemies promote terror among the people by talking lies.